Where should a first-time visitor stay in Sydney for sightseeing and food?

I would pay for a harbour-view room only if the view itself is a priority. Wynyard or Town Hall keeps the trains useful and lets you visit Circular Quay and The Rocks on a dedicated harbour day. Then spend an evening eating in a different neighbourhood instead of staying around the same expensive address. Compare the total room cost and your likely return trip after dinner, not just the headline nightly rate.